NE NEWS BUREAU
CHENNAI, NOV 24
In a major enforcement breakthrough, the CGST Chennai North Commissionerate has uncovered a multi-state fake GST invoicing racket suspected to have enabled more than ₹350 crore in GST evasion. The operation led to the arrest of a Chennai-based tax consultant who allegedly masterminded the creation of dozens of bogus firms to generate fraudulent Input Tax Credit (ITC).
- 95 shell firms unearthed across Tamil Nadu and Karnataka in massive bogus ITC scam
- Digital-footprint analytics, IP mapping help investigators identify mastermind
- Preliminary probe already exposes ₹50.85 crore fake ITC in Chennai North alone
- SIM cards, cheque books, rubber stamps seized; accused remanded as wider probe intensifies
Network Used 95 Bogus Business Entities for Fake ITC Claims
According to CGST officials, the racket floated over 95 shell companies across Tamil Nadu and Karnataka by misusing the ID credentials of individuals. These non-existent firms were used to issue fake GST invoices without any actual movement of goods, enabling the illegal availment and passing on of ITC.
A preliminary probe into 12 entities linked to the Chennai North jurisdiction alone has already revealed ₹50.85 crore worth of fake ITC. Investigations into the remaining 83 entities are still underway.
Digital Footprint Analysis Leads to Breakthrough
The investigation gained pace after officers deployed digital footprint and IP address analytics to correlate GST return filings and identify suspicious patterns. This data-driven approach helped pinpoint the location of the key accused, who was running an unregistered tax consultancy named M/s A.S. Associates in Chennai.
A search operation at his premises resulted in the recovery of incriminating evidence including:
- 196 SIM card covers and SIM cards
- 42 cheque books
- 41 button phones
- Multiple company rubber stamps
Officials say these tools were used to create and manage the network of fake entities.
Accused Arrested Under CGST Act; More Arrests Likely
Based on the seized evidence and the accused’s voluntary statement, CGST officers arrested him on November 22 under Section 69 of the CGST Act for offences punishable under Section 132. He was produced before the Additional Chief Metropolitan Magistrate (Economic Offences), Chennai, and has been remanded to judicial custody.
Sources indicate that more arrests are expected as teams continue to track the remaining shell companies and beneficiaries of the fake GST network.
